Bill C-19 (Historical)

An Act to amend the Competition Act and to make consequential amendments to other Acts

This enactment amends the Competition Act and includes the introduction of an administrative monetary penalty in respect of cases of abuse of dominant position, an increase in the amount of administrative monetary penalties in respect of deceptive marketing cases and the repeal of all airline industry specific provisions and criminal provisions dealing with price discrimination, predatory pricing, discriminatory promotional allowances and geographic price discrimination. This enactment also provides that the court may make an order in respect of cases of false or misleading representations to require the person who engaged in the reviewable conduct to compensate persons affected by the conduct and issue an interim injunction order to freeze assets where the Commissioner of Competition intends to ask for that order. This enactment also provides for consequential amendments to other Acts.

Energy Costs Assistance Measures Act

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, this is an interesting debate because the fact is that it is the current Prime Minister who actually holds the record for giving the most corporate tax cuts to the wealthiest in Canada. The competition between the Harris regime and the current Prime Minister to see how many of their friends they can reward is something Canadians are sick and tired of.

I have a question for the hon. member concerning a specific point she made in her debate today relating to the fact that consumers could somehow rebel and could actually force the oil and gas companies to follow certain types of procedures. That is not very realistic because people need to take their kids to school and taxi drivers and truck drivers need to work. Some people in rural pockets of the country who cannot access mass transit are susceptible to the whole industry in itself.

What is interesting to note from the testimony we heard in the industry committee is that prior to hurricanes Katrina and Rita the industry experts classified their profits from this as spectacular. The government's bill does nothing about that situation and neither does the Competition Act nor the amendments. Anti-competitive behaviour is one thing but profiteering ostensibly is another, and it is not taken care of in the act. In fact, big oil companies reaped almost $38 billion in profits in the first half of 2005 alone, before the hurricanes are calculated in.

During our discussion at the industry committee, the Minister of Industry talked about the fact that we do have some legislative changes coming on Bill C-19. When I asked him about those changes and how the industry would react to them he said, “We didn't want it to be seen by industry to be too arbitrary and punitive”. That was his response to the punish mechanism that is now being put in place.

If the Minister of Industry is creating a system that is not punitive and is not going to be seen as punitive to big oil companies, could the hon. member tell us what motivation these companies would have to actually amend their practices in this field?

[James Rajotte, Conservative, Edmonton—Leduc, AB]

Madam Speaker, it is my pleasure to address Bill C-66.

I want to read the bill into the record and what it is supposed to do, because it is important in terms of analyzing whether or not it actually fulfills the government's objectives in terms of addressing the increasing costs of home heating fuel and gasoline prices for Canadians. The full title of the bill is “an act to authorize payments to provide assistance in relation to energy costs, housing energy consumption and public transit infrastructure, and to make consequential amendments to certain acts”. The bill has three main parts.

Part 1 of the bill outlines who will receive a payment and how much. The payment is targeted to some low income Canadians and will be sent to three different groups: first, $250 to families entitled to receive the national child benefit supplement in January 2006; second, $250 to senior couples where both spouses are entitled to receive the guaranteed income supplement, the GIS, in January 2006; and third, $125 to single seniors entitled to receive the GIS, in January 2006. These are one time payments that will not be issued until the bill is passed.

Part 2 of the bill increases and expands financial assistance and incentive programs for houses and housing projects that make heating system upgrades, improve windows and engage in draft proofing, et cetera. All of this assistance will be delivered over a five year period.

Part 3 deals with public infrastructure. It states that $400 million previously provided for under Bill C-48 will be freed up by Bill C-66 in each of the next two fiscal years for municipalities to boost investments in urban transit infrastructure.

Parts 4 and 5 of the bill are housekeeping measures.

In addition to the measures laid out in the bill, the government has also announced two other measures with respect to energy prices. First, the office of petroleum price information will be created. Second, the government has indicated it will be introducing amendments to Bill C-19 which are intended to strengthen the role of the Competition Bureau in investigating allegations of price fixing in the oil and gas industry.

To begin, I would like to discuss the reasons for various increases in energy costs. Then I will address the issue of payments for low income Canadians and offer an alternative plan to the Liberal plan. Then I will discuss the secondary measures introduced to attempt to offset high energy prices which are outlined in the bill and those announced outside of the bill. Finally, I will discuss energy policy generally under the government.

I would like to briefly outline the current supply and demand issues facing Canadian consumers, Canadian businesses, and our market. There has in fact been a spike in energy prices. There have been a number of contributing factors to the reduction in supply that have caused this spike.

The first obviously is natural disasters. Hurricanes Katrina and Rita have caused considerable disruption in the supply of oil and gas in the Gulf of Mexico and across North America. As of October 11 three refineries were still shut down from hurricane Katrina and four were still shut down from hurricane Rita, obviously taking that supply off the market.

While Canada is in fact a net exporter of energy, we do import a great deal of our refined oil and gas, especially those provinces east of Manitoba.

International issues such as the political troubles in Iraq, Nigeria and Venezuela have created uncertainty in the supply chain. In addition, there have been production declines in the North Sea and Russia, while worldwide spare production capacity is at its lowest level in three decades. Only Saudi Arabia at this point has any spare crude oil production capacity available.

Despite the decrease in supply, demand has remained stable. The 2004 demand increased worldwide by approximately 3%. This growth will likely slow, but will continue to grow between 1.5% and 2% in 2005-06.

At a briefing this week by four of the industry associations involved in the energy sector, it was basically pointed out that over 40% of the increase in the demand for worldwide crude was as a result of the growing economy in China particularly.

This steady demand coupled with the decrease in supply has led to increased energy prices both at home and abroad in every sector.

I must point out, however, that most of the Canadian information on the projected increase in energy prices for the upcoming winter actually comes from the U.S. Energy Information Administration, a statistical agency of the U.S. Department of Energy. It is a shame that similar information cannot be obtained from the federal government through the Department of Natural Resources.

MJ Ervin & Associates, the private sector forecaster and observer of oil and gas prices, has estimated that the average price of home heating fuel has jumped to its highest level on record, 93¢ a litre. The best guess is that homes heated with oil can expect to pay 32% more this year, while homes heated with natural gas can expect to pay 48% more. Electricity bills will also rise but not as dramatically.

In New Brunswick the cost of home heating oil is 5¢ higher than the national average. New Brunswick Power has announced it will request a 10% increase in its electricity rates next year. In Quebec where 70% of the homes are heated by electricity, the provincial energy board will review a request by Hydro-Québec to increase rates by 3%.

In Ontario the Ontario Energy Board approved a rate increase for Enbridge gas that will increase natural gas bills by about $123 a year. Union Gas also sought and received a rate increase. Sixty per cent of Ontario residents rely on natural gas for heating.

The British Columbia Utilities Commission just approved a 13.3% increase in natural gas. Even in Alberta, Direct Energy has asked the Alberta Energy and Utilities Board to approve a rate increase that will increase the average home heating bill by more than 20%. The average monthly bill for October in Calgary will be $162.

As we can see, the increase in the cost of heating one's home is affecting Canadians from coast to coast to coast. What has the government done to deal with this massive, broad problem facing Canadian citizens and businesses across the country?

At the heart of Bill C-66 is a payment for some of Canada's poorest citizens. Obviously we in the Conservative Party support measures that provide relief for low income families. We have an obligation to represent and support those who have so much less than the average Canadian.

The government estimates that 3.1 million low income families, or 10% of Canadians, will receive these so-called rebate cheques, although they are actually payment cheques. I am pleased that some effort is being made to try to assist low income Canadians. These Canadians should not simply be left on their own to try to deal with rising energy costs, particularly those on fixed incomes dealing with increases in home heating.

The problem is that the delivery method chosen by the government will miss too many Canadians who need help paying their heating bills and their gasoline bills for their cars to get them to and from work. Persons with disabilities who claim a disability benefit will not receive the payment. Seniors who qualify for the GIS but do not claim it will not receive a payment. A Statistics Canada study released on Friday, October 21, 2005 found that over 206,000 eligible individuals missed out because they did not in fact claim the GIS.

With respect to seniors, we also have a situation where someone whose pension makes them equivalent to someone on the GIS will not in fact receive any sort of assistance under the government's program. Students will not receive a payment.

This program will not help poor Canadians who do not have children. Research from Statistics Canada again indicates that nearly two million individuals under 65 who fall below the low income threshold have no children. Under this bill these individuals will receive no help.

It will miss most farmers who have been hit very hard by the energy price spike. They must not only heat their homes but their barns as well. It will also miss many Canadians who are poor, but not quite poor enough in the government's eyes to qualify for a payment. Of course, it must be noted that this plan does not in any way, shape or form offer relief at the pump nor compensate for the increase in fuel prices.

We in the Conservative Party have an alternative. We have an alternative because too many Canadians will not be assisted by this plan. We have a plan that will help all Canadians. The fact is the government should start by axing the tax on the tax at the pumps. This would give an immediate tax break to all Canadians. Two Liberal members spoke and basically gave the party line as to why the Liberal government does not want to do this.

The fact is it would be a very immediate measurable thing that would impact Canadians by reducing the tax at the pumps. It would obviously reduce it for people who drive their own vehicles but it would also reduce it, as the member mentioned, for public transit. It would also reduce it for municipalities and others who have to pay for school divisions, who have to pay for fuel, who have to ship students to and from school, municipalities that have to subsidize their public transit.

Further to that, if the government wants to help public transit, then it should adopt the plan put forward by our leader this summer in Toronto to allow people who have public transit passes to claim a certain percentage of the cost. It is not one or the other. We can do both at the same time and offer tax relief to more than just a few Canadians in this plan.

The fact is 42% of the cost of a litre of gasoline is federal, provincial and municipal taxes, including the GST. As a comparison, in the United States it is 27%. Currently the 7% GST and the HST are charged on gasoline after federal, provincial and in some cases municipal governments have added their excise taxes.

The fact is the Liberal government continues to overtax Canadians. The government should not profit when people are feeling the effects of these increased prices in their pocketbooks and at the dinner table.

For every 1¢ increase in gasoline prices, the federal government receives about $32 million in extra revenue. That money should be going back into the pockets of Canadians and not into the pockets of the government.

In addition, the Conservative Party will reduce personal taxes overall. That is the second way to immediately address this issue in a broad way. Instead of selectively picking some low income Canadians over other low income Canadians, we could reduce personal taxes overall.

A Conservative government's approach would provide immediate and long term broad based tax relief starting with reducing personal income tax rates and substantially raising both the basic personal exemption and the spousal exemption under the Income Tax Act. Reducing personal income taxes would hike the take home pay and raise the standard of living of all Canadians.

The fact is we have driven the tax agenda in this country for years and we will continue to do so because it is fair. It is fair that Canadians keep more of their own life energy in their own pockets to spend as they best see fit.

I want to move on to the second part of the bill. I want to point out that while part 1 books the expenditures on payments to low income Canadians in the current fiscal year, the expenditures in part 2 are over five years. This is very odd accounting, but as we are finding out more and more with the way the government deals with budgets and finances, it is simply a classic example of Liberal accounting.

What I believe the Liberals are trying to do is to force us to accept spending on the EnerGuide program, spending that could have been announced in past budgets or in the next budget. They want us to accept this by tying it to the energy payment for low income Canadians. There is no reason to put it in this bill.

In fact Bill C-66 includes $205 million from already announced energy efficiency programs, and $100 million which is being moved out of Bill C-48 and into Bill C-66 under the guise of energy efficiency. This is simply ridiculous. This clause of the bill is completely unnecessary. A whopping 43% of the funds set aside for the bill will go to the administration of the EnerGuide program, not toward tax cuts or rebates.

In theory, the EnerGuide program provides financial assistance to homeowners and landlords to help improve energy efficiency. I encourage members to talk to constituents who have actually utilized this program, because I have. The fact is it is an extremely complicated program. It requires a homeowner or landlord to pay for an inspection of their home both before and after renovations to see if they can receive a loan or rebate for the changes they have made to improve the energy efficiency of their own home. Some funding will flow through the Canada Mortgage and Housing Corporation, but will benefit only 130,000 low income Canadians. The same number, only 130,000 Canadians, have used this program since October 2003.

We are spending more than $1 billion on an EnerGuide program that may be only used by 260,000 Canadians. This is yet another example of misguided Liberal priorities.

I would like to move on to part 3 of the bill, which deals with infrastructure. Again, this section of the bill is not necessary. This spending was announced under Bill C-48, the second budget bill, but has been moved to Bill C-66, which is a bad example of tricky Liberal accounting. This is certainly a question that the government should have to answer.

First of all, how can the Liberals introduce a budget by Bill C-43 and, second, declare non-confidence in their own budget, introduce a second budget, say that the funding would proceed once they knew the fiscal figures for 2004-05 and say that spending would commence as of August 2006? I believe that is what the parliamentary secretary told the Senate committee. Then, somehow, the government moved spending from that bill, Bill C-48, to this bill, Bill C-66.

This money does not help rural Canadians, who pay some of the highest energy costs. In addition, it does not provide the stable funding that municipalities are looking for. The money is actually being allocated without any thought as to what it actually might be used for.

The Conservative Party, on the other hand, is committed to developing an infrastructure plan that would not only provide money to municipalities to meet infrastructure needs, but would also provide benchmarks to allow local governments the ability to plan in the long term for their own infrastructure needs.

We have also committed to meeting and even possibly exceeding the amount of money spent on infrastructure by the federal government through the so-called gasoline tax transfer. Such commitments are very much in line with the infrastructure goals of the Federation of Canadian Municipalities.

Moving to the last two sections of the bill, I note that they deal with measures that are rather small measures in terms of costs but large in terms of the federal government.

First, Industry Canada is finally giving more money to the Competition Bureau to allow it to conduct investigations into collusion. The Conservative Party and members of the Standing Committee on Industry, Natural Resources, Science and Technology have been requesting the government to increase funding to the bureau since April 2002. The bureau has indicated for years that it does not have the resources needed to carry out the investigations.

However, we have not seen the amendments to Bill C-19 that would make changes to the Competition Act and allow the bureau more flexibility in its investigations. I am certainly looking forward to those amendments, although I have a bit of a digression here. At committee we have heard witnesses on Bill C-19, which the government is sort of presenting as the answer to increased gasoline prices by saying that if there is any evidence of collusion it will be dealt with by increasing the powers of the competition commissioner.

I can accept the argument that perhaps more resources are needed for the bureau, but the fact is that any six Canadians can write to the competition commissioner and ask her to investigate any sort of a discrepancy they feel is in the oil and gasoline industry. The government's argument that in fact the bureau needs more powers to conduct investigations is actually ridiculous.

The fact is that Bill C-19, according to some very able lawyers across this country, is simply an incredibly flawed piece of legislation. It is in no way an answer to what the government is saying it is in terms of dealing with gasoline prices. Frankly, the government should even withdraw the bill. It should send this back to the justice department and rewrite a proper bill.

Second, to return to Bill C-66, it would create the petroleum price monitoring agency. It is rather ironic that the government is presenting this as an answer, because lo and behold, the current Prime Minister eliminated this in the 1995 budget. I find it a little strange that something that the then finance minister and current Prime Minister eliminated in 1995 is now being presented by him as an answer in 2005.

The fact is that if the natural resources department would act in a practical manner and provide this information we could easily have this information available. The natural resources department and this entire government have languished in developing a long term energy framework and have actually contributed to the high heating costs we will experience this winter.

The Conservative Party has been focusing for a long time on a long term energy framework which would focus on renewable and non-renewable energy sources, take into account outstanding obligations and meet our long term requirements for domestic consumption and export.

We believe that strengthening energy market integration will ensure greater reliability of energy supplies across the country. We will explore ways to reduce barriers to the movement of energy products across provincial and other borders. The fact is that the Liberals have not addressed any of these issues. The Liberals have not had the time to monitor or publish an energy policy or reports on gas prices, which was promised this fall. Private companies such as MJ Ervin and Associates have stepped in to fill the void.

We find that the bill is severely lacking and way too limited in scope in terms of who it helps and that it is misguided in its approach. We will begrudgingly support the bill, as it does help some low income Canadians, but we certainly hope that the government will bring forward another bill. We will certainly be looking forward to committee, where we can actually try to expand this to help all low income Canadians and in fact all Canadians who are dealing with higher energy costs.

Gasoline Prices

[David Emerson, Liberal, Minister of Industry]

Mr. Speaker, Bill C-19 is in the House. It does strengthen the Competition Act. I am prepared to look at further amendments. We are prepared to look at giving the Competition Bureau the power to undertake investigations of industries and take action as needed. We are prepared to listen if the hon. member has some suggestions for further improvements to the act. We will have further suggestions of our own.

[David Emerson, Liberal, Minister of Industry]

Mr. Speaker, I will be sharing my time with my hon. colleague, the newly minted Minister of Natural Resources.

On behalf of the government, I am very pleased to respond to the motion before the House. There are few occasions when one gets an opportunity to debate an issue with such direct and obvious consequences for Canadians. The price of energy, the price of oil, home heating oil and gasoline is something that all of us deal with in our daily lives. It is something we have seen and felt in terms of prices at the pump in our communities.

We see it through the whole chain of energy prices. The price of electricity is affected by the price of oil and natural gas and coal. All of these are energy products. There is a complete chain of prices affected by some of the gyrations we have seen in recent months to world energy prices and it has effects throughout our economy. It has effects clearly in our ridings where people driving to work face substantial increases in the cost of commuting to work, in the expense of earning a living. We see it as well in commercial areas. In my province of British Columbia the price of oil and fuel was a fundamental cause behind the dispute at the port of Vancouver this summer. That dispute had major implications not just for British Columbians but for all Canadians as we saw shipments and containers held up at the port.

We can all see there are specific ways in which the price of gas and oil does affect Canadians and the economy in a number of ways. It is important to bear in mind the underlying causes of the current price situation we are facing, whether we are talking about the price of gas, diesel, heating oil, propane, natural gas or any of the other energy products that are part of the energy chain. We all recognize that there is no silver bullet. There is no magic solution that is going to quickly realign international supply and demand and bring prices back down very quickly.

Let me touch on some of the fundamentals of the supply and demand for gas and oil. Clearly, oil is a globally traded commodity. There has been strong demand around the world but it is combined more than ever before with uncertainties about the supply of oil, the reserves and various other shorter term disruptions to supply.

If we go back to January 2002, the world price of crude oil was about $20 U.S. per barrel. Today it is more than $60 per barrel. On a Canadian average basis the retail price of gasoline was 73.2¢ per litre in 2003. Over the first eight months of 2005, it averaged 89.4¢ per litre and of course today it is over $1 a litre.

We hear a lot about the tax issue as one of the drivers of the price of gas and oil, but the reality is that of the 16.2¢ per litre increase between 2003 and the first part of this year, 14.9¢ per litre was crude oil costs. That means that less than a penny, or .8¢ per litre was accounted for by federal taxes. Just half a cent was made up of provincial taxes on average.

If we look at the rise in gasoline prices and we recognize that it has been driven by international market conditions, we should look at those market conditions. Clearly the impact of recent hurricanes on the American oil and gas sector in the Gulf of Mexico was a major factor, but it was a temporary factor.

There are other longer term factors. In fact, the Prime Minister pointed out one of them recently. When he spoke to senior public servants on September 20, he mentioned the major forces shaping the future for Canada and this government's agenda. One of those was the rise of nations such as China and India as global economic powers. He stated:

Consider that in 2004, as measured by purchasing power parity, the United States accounted for about 20% of the global economy with less than 5% of the world's population. Together, China and India also accounted for almost 20% of the world's economy, but with 40% of its population -- so it's clear where the growth potential lies.

It is not just potential. It is happening now as we speak.

It takes a lot of energy to run the factories of China and to get products to markets overseas. It takes a lot of energy to power the growth of emerging consumer societies with a rapidly expanding middle class and populations that strive to achieve the kind of standards that we have in North America. They see energy use as a critical part of achieving those increased living standards.

Since 2001 China and India's demand for oil has grown by more than 2.3 million barrels and that is per day. This accounts for nearly 36% of world oil demand growth during this period. In 2001 China and India accounted for 9% of world oil demand. Today they account for 11% of that demand. It is a trend that will likely continue. That is on top of the growing demand for energy from the traditional high demand industrial economies like Canada, the United States and Europe.

These are some of the fundamental drivers of the rising demand for oil. It drives the demand for natural gas and the products that are made from gas as well, but supply issues are also important. World crude oil production capacity is still exceeding demand, but the gap between supply and demand has been closing in recent years.

The OPEC countries used to have spare crude oil production capacity of between four million and six million barrels per day. They could bring this spare capacity into production in less than 30 days and take the edge off price spikes as a result. Estimates today are that spare capacity is now down to less than two million barrels per day.

Not only is demand rising and supply not keeping pace, but there are other factors. There are a lot of steps in the supply chain between crude oil coming out of the ground and gasoline going into our cars' gas tanks or heating oil going into the tanks in our basements.

Consider the capacity for petroleum refining as an example. Today the refinery capacity all around the world is operating virtually full out. Here in North America both American and Canadian refiners are operating at 97% utilization rates, which for all intents and purposes is operating full out at full capacity. As the demand for petroleum products continues to grow, the refining system's inability to keep pace is going to lead to continued upward pressure on prices.

Why not build more refineries? An important part of the answer has been that these are big and extremely expensive investments. Until quite recently the profit margins in refining were simply not good enough to attract more investment into the refining business. The bottom line is that the refining business is going to have to become more profitable to attract the kind of investment that will be required to increase refining capacity and deal with that weak link in the supply chain.

Many hon. members may ask what the world market has to do with Canada. Are we not self-sufficient in oil and gas? The reality is that we may be, but we represent only 3% of the world's crude supply and that really means we are a price taker. We cannot affect the world price.

Hon. members will have suggestions tonight as to what we should do about this situation. I want to talk a bit about price monitoring. I am very comfortable working with my colleague, the Minister of Natural Resources, to develop a more transparent, authoritative mechanism for analyzing and keeping track of energy, oil and gas prices in Canada. I am very happy to hear members' suggestions and comments about that. I think it is something that we should consider. Our citizens and consumers and businesses have the need for good information and if we need to create a new mechanism to do that, let us do it.

With respect to competition, I have said many times that there have been at least five investigations in the last 15 years into the competitive conduct in the gas and oil business. No anti-competitive behaviour has been found.

Clearly, I believe that Bill C-19 which is before the House would help us with administrative monetary penalties. I am open to suggestions from hon. members as to further amendments that we could make to the Competition Act, such as giving the Competition Bureau the power to initiate its own investigations without reacting to a complaint. I am open to other suggestions as to what we might do with the Competition Act that could be helpful in dealing with this situation on behalf of Canadians.

[David Emerson, Liberal, Minister of Industry]

Mr. Speaker, I hope the opposition supports Bill C-19. If we can amend and improve Bill C-19, we certainly will consider that.

[Paul Crête, Bloc, Rivière-Du-Loup—Montmagny, QC]

Let us talk about transparency, Mr. Speaker. For the past five years, the Bloc Québécois has been asking that the powers of the Competition Bureau be increased to enable it to investigate extensively in the petroleum sector and take action, as required. This bureau's president himself testified before the committee that he lacked the necessary power to take effective action.

Will the government undertake today to amend Bill C-19 so as to provide the Competition Bureau with the effective tools and the powers it needs to act with regard to the petroleum sector?

Main Estimates, 2005-06

[Mauril Bélanger, Liberal, for the President of the Treasury Board]

moved:

Motion No. 1

That Vote 1, in the amount of $125,413,000, under PRIVY COUNCIL — Department — Program expenditures, in the Main Estimates for the fiscal year ending March 31, 2006, be concurred in.

Madam Speaker, I am pleased to take part in this debate in favour of the motion to approve the budget of the Privy Council Office for 2005-06.

I find it unimaginable that anyone could be against passing the Privy Council Office budget and that some hon. members in the opposition intend to obstruct it. This shows a lack of understanding of how the Government of Canada works. Those who oppose passing this budget should take the time to learn more about the basic principles of public administration and government.

The Privy Council Office plays a central, not to say crucial, role in the planning and implementation of major government policies. As a central agency, the Privy Council Office conducts strategic analyses of complex issues and does a thorough review of proposals and government orders as they are presented.

That is what allows the Privy Council Office to advise the government on developing and implementing its policies. It is the central agency par excellence and ensures that the general policy objectives, as set by the government and by Parliament, are met.

One of the most important documents setting out the objectives of the government's policies and its plan of action for achieving them is the throne speech. It is not surprising, therefore, that the Privy Council Office and particularly the Clerk of the Privy Council are closely involved in preparing the throne speech as advisors to the government on the aims of its policies and its plan for implementing them, in close cooperation with the PMO.

It may rightly be said that the throne speech is the equivalent of a bible for the PCO, as for the whole of the government apparatus. It reflects the government's vision of the type of Canada it hopes to build through the policies and programs contained therein.

There is another analogy, which perhaps better explains the link between the PCO and the throne speech. The throne speech becomes a sort of routing slip. It defines the government's legislative program and the commitments to be met. It is in this statement that the PCO and the rest of the government machine find their routing slip. The PCO ensures the work is carried out.

It will be remembered that the October 2004 throne speech dealt with a number of broad themes, namely a vigorous economy; the health of Canadians; children, caregivers and seniors; native Canadians; cities and communities; our environment; an influential role of pride in the world and governing with a common goal.

With your permission, I will describe some and, if time permits, each of them, bearing in mind that I do not have time here to mention all the objectives the government presented in each case. We have either accomplished or are on the way to accomplishing many more than what can be mentioned in a single speech.

What I want to get across to my colleagues opposite—in case some have not yet grasped it—is that the PCO was closely involved in defining each of these strategic objectives. It would be unrealistic to think that a government can successfully manage such a large range of problems without drawing on the PCO's functions of analysis, coordination and critical examination.

So I will start with a vigorous economy.

The current government is working to lower the debt-to-GDP ratio to 25% within 10 years, a goal it reiterated in the 2005 budget along with its ability to reach that goal.

We said that we would review the expenditures and reallocate the resources as needed. The 2005 budget confirmed that the expenditure review committee has identified nearly $11 billion in cumulative savings over the next five years, which will be reinvested in core federal areas of responsibility.

The first part of our five-point economic strategy—building a highly skilled workforce, promoting learning in the workplace and updating labour market agreements—is on track, as the 2005 budgetary statement confirmed.

We announced the implementation of an action plan on labour market integration of immigrants trained abroad. This plan allocates financial support to facilitate the foreign credential recognition process, provide immigrants with better language training and develop a portal so future immigrants can better prepare for their integration into Canada.

There is also the learning bond program—an innovative incentive to encourage low-income families to save for their children's education—funded with money set aside in the 2004 budget and which is supposed to begin on July 1. We also improved the program so as to introduce more people to the registered education saving plan and encourage low-income families to take advantage of it.

The second part of our five-point economic strategy is also progressing rapidly. The National Science Advisor was appointed to help universities, colleges and businesses renew their commitment to establishing a real national science program.

The third element of our five-point economic strategy, which deals with a smart regulatory system, was proposed by the External Advisory Committee on Smart Regulation; it provides for a transparent and predictable regulatory system. Work in this area is being pursued at the cabinet committee responsible for domestic affairs. Bill C-19, to amend the Competition Act, has already been introduced in the House.

The fourth element, which is the reform of the equalization program, has led to the adoption of a new framework for equalization and territorial formula financing. Under that new framework, federal support will be increased by $33 billion over the next 10 years. Legislation on the reform of the equalization program is currently before the House in the form of Bill C-24.

We promised a strategy for the north, a first in Canadian history, and we have started work on developing that strategy.

The fifth element includes the promotion of investment through the adoption of a sound monetary and fiscal policy and a competitive tax system.

The implementation of this sound monetary and fiscal policy has already been completed. The 2005 budgetary statement provides for balanced budgets through 2009-10. The 2004-05 fiscal year marked the completion of the five-year tax reduction plan totalling $100 billion, which was announced in 2000. The 2005 budget contains measures to reduce the general corporate tax rate to 19% and to eliminate the corporate surtax.

Another aspect of the fifth element of our five-point economic strategy consists in building on the Smart Borders initiative to strengthen security in North America while facilitating the flow of goods and people across the border.

Let me turn now to the health of Canadians. Long before last week's Supreme Court decision, this government set out an ambitious, yet absolutely crucial, set of policy deliverables to ensure that Canadians would have the timely and quality health care they deserve.

This complex set of policy goals includes: reduction in wait times; establishing a requirement for evidence based benchmarks; comparable indicators; clear targets; and transparent reporting. It also includes an increase in the number of doctors, nurses and other health professionals; improved access to home and community care services; improved access to safe and affordable drugs; setting goals and targets for improving the health status of Canadians; an annual report on the health status and health outcomes; the promotion of healthy living; enhancement of sports activities at both the community and competitive levels; and health protection. It also includes working with provincial and territorial partners on reforms and long term sustainability of the health system and on health promotion.

The cornerstone of our health care agenda is the government's commitment at last September's first ministers meeting of $41.285 billion over 10 years. Budget 2005 will implement the first year of the funding commitments related to the 10 year plan to strengthen health care.

As regards reductions in wait times, budget 2005 provides $15 million over four years for wait times initiatives. The provinces and territories are engaged with the federal government on developing a process for wait time reductions.

Budget 2005 also provides $110 million over five years to improve the data collection and reporting of health performance information; $75 million over five years to integrate internationally educated health care professionals; $170 million over five years to help ensure the safety and effectiveness of drugs and other therapeutic products; $300 million over five years to encourage healthy living, and prevent and control chronic disease; and finally, increased funding for Sports Canada to $140 million annually.

This funding builds on the additional $2 billion health care transfer to the provinces provided for in budget 2004 through Bill C-18.

The next theme in the government's agenda that I would like to address concerns children, caregivers and seniors. As members know, this government has placed very strong emphasis on children and the need for a national system of early learning and child care. We spent the day debating that.

Budget 2005 provides $5 billion over five years to help build the foundations of such a national system. To date, we have signed bilateral accords to support the development of early learning and child care with Manitoba, Saskatchewan, Ontario, Newfoundland and Labrador, and Nova Scotia.

We have concluded an agreement with the government of Quebec to enable that province to establish its own parental benefits plan, with the federal government providing a one time start-up fund of $200 million and an annual premium reduction of approximately $750 million for the government of Quebec to use toward its plan.

Let me turn to our commitment to improve tax based support for Canadians who care for aged or infirm relatives or those with severe disabilities. The overall commitment of the federal government is $1 billion over five years. Budget 2005 is the first step toward a more comprehensive strategy to support unpaid caregiving.

Acting on the recommendations of the technical advisory committee on tax measures for persons with disabilities, budget 2005 proposes to increase tax relief for persons with disabilities by $105 million in 2005-06, growing to $120 million by 2009-10. In fact, with budget 2005 the government is acting on virtually all of the committee's recommendations.

It is important to note the impact of the reduced tax burden on low and modest income families which budget 2005 announced. By 2009 the amount that an individual can earn tax free will increase to at least $10,000 and most of the benefit will go to those with low and modest incomes.

The Speech from the Throne committed the government to do more for Canada's seniors. Specifically, it committed the government to continue the new horizons program and explore other means of ensuring that we do not lose the talents and contributions that seniors make to our society.

In the February 2004 Speech from the Throne, the government announced a new deal for Canada's cities and communities. The government also established a new secretariat for cities and a new federal department of infrastructure and communities. We said we would make available a portion of the federal gas tax to municipalities to enable the containment of urban sprawl and to invest in new sustainable infrastructure projects in areas such as transit, roads, clean water and sewers.

Budget 2005 has $5 billion over the next five years in gas tax revenue to be given to the cities and communities. It also adds new funding of $300 million to green municipal funds. This builds on budget 2004 in which the goods and services taxes paid by municipalities were rebated entirely by the federal government

The Government of Canada has now signed gas tax revenue sharing agreements with three governments: British Columbia, Alberta and Yukon. Two more are anticipated before the end of this month. They are with the governments of Ontario and Quebec.

In addition, the government committed to move quickly to flow funds within existing infrastructure programs. Significant infrastructure investments have been announced. There is the $1 billion funding package for the Toronto Transit Commission; $500 million for the expansion of the Vancouver Convention Centre; and significant projects undertaken at major Canada-U.S. border crossings such as Windsor-Detroit.

We have reached agreements with Quebec on financially supporting Quebec municipalities with the challenges of renewing their infrastructure; with Ontario in support of improvements to Ottawa's public transit system, and of course with the expansion of the Congress Centre also in Ottawa; and with Prince Edward Island on infrastructure funds for P.E.I. communities.

Other policy deliverables by the government to support and improve the quality of life in our cities and communities include the affordable housing initiative, the supporting communities partnership initiative for the homeless and the residential rehabilitation assistance program.

I may not have time to deal with the initiatives that we have taken on the environment and the numerous initiatives we have taken on Canada in the world.

I would like to provide an overview of the government's agenda as it relates to a role of pride and influence for Canada in the world. The government promised and released a comprehensive international policy statement which provided an updated and integrated approach to Canada's foreign policy objectives: trade and investment needs, defence requirements and the development assistance program.

One of the first actions of the government after the February 2004 Speech from the Throne was to develop and approve Canada's first ever national security policy. Considerable work has been undertaken since then in implementing the new security policy and a progress report on implementation to date will soon be released.

The government established a cabinet committee on security, public health and emergencies and has appointed a national security adviser to the Prime Minister. Separate legislation to create the Department of Public Safety and Emergency Preparedness has been passed and the new Canada Border Services Agency legislation is before Parliament.

We have taken steps to build a more sophisticated and informed relationship with the United States. As part of the new enhanced representation initiative, the new Washington secretariat has been established and has commenced operations. Other projects are under way to advance advocacy, support policy coherence and share information among all levels of government.

Earlier this spring the Prime Minister, President Bush and President Fox announced the security and prosperity partnership launching a series of negotiations among the three countries on key aspects of security, prosperity and quality of life for North Americans.

On the defence front, our chief policy deliverable was to invest more in our military. Budget 2005 provides $12.8 billion in new money for defence over five years. It provides $3.2 billion over five years to strengthen military operations by improving training and operational readiness, enhancing military medical care, addressing critical supplies and repair shortages, and repairing infrastructure.

We have promised investments in key capital equipment, for example, new armoured vehicles and replacements for the Sea King helicopters. Budget 2005 provides more than $2.7 billion for new medium capacity helicopters, utility aircraft and military trucks.

We are increasing regular forces by 5,000 and the reserves by 3,000, and training regional peacekeepers, such as in Africa for the African Union mission in the Darfur region of Sudan.

The February 2004 Speech from the Throne promised the creation of the Canada Corps to help young Canadians participate in international assistance; provide to developing nations Canadian expertise and experience in justice, in federalism, in pluralistic democracy; and to bring the best of Canadian values and experience to the world.

The new Canada Corps was mobilized successfully and effectively for monitoring the elections in Ukraine last December, which we all remember with great pride.

Budget 2005 commits to doubling aid to Africa by 2008-09 from its 2003-04 level. It also provides additional funding to combat disease in developing countries and $3.4 billion over the next five years in increased international assistance. We are maintaining Canada's leadership role in the creation of a new international instrument on cultural diversity and continue to participate actively in a number of international organizations, be it the Commonwealth or the Francophonie.

This is not the complete list of the government's policy goals and the actions we have taken to achieve them. In each and every item that I have described to the members in this House, the Privy Council Office is right there helping to analyze and develop the policy, challenge any weakness, exert due diligence, bring together disparate parts from across the breadth of government, tie together the loose ends and manage the preparation of legislation and its follow-up.

In short, the Privy Council Office is engaged in all aspects of the cabinet's work in governing the country. Voting against the motion to support the approval of the Privy Council Office budget for fiscal year 2005-06 would cause considerable damage to the functioning of government as a result. It would most certainly be against the interests of all Canadians.

I therefore encourage and exhort all hon. members of the House to do the right thing and to vote in support of the motion. To do otherwise would be unconscionable. It is rather surprising that we would be confronted with a motion that would remove the entire funding for the Privy Council Office. It is a demonstration of a lack of understanding of how government functions.

In concluding my remarks, and I know I will have occasion to answer some questions if there are any, we definitely urge all members of the House to consider seriously the implications of not supporting this motion, which is central to the ability of government and Parliament to function.

Gasoline Prices

[Jerry Pickard, Liberal, Parliamentary Secretary to the Minister of Industry]

Mr. Speaker, I welcome this opportunity to address Motion No. 165 now before the House. It contains two distinct proposals. One concerns the establishment of a petroleum monitoring agency and the other concerns unspecified amendments to the Competition Act. I will address each proposal in turn.

The first proposal is not novel in any way. As everyone in this place recalls, the petroleum industry has been monitored many times over the last several years and we have found through that monitoring that there are high and low fluctuations.

Following studies of the gasoline price increases during the winter of 2003, the Standing Committee on Industry, Science and Technology recommended the establishment of a petroleum monitoring agency to be responsible for the collection and dissemination of data on gasoline pricing.

The committee's report found that significant increases in prices had been as “the result of competitive reactions to a series of international crises and abnormally cold weather that gripped northeast North America last winter”. Furthermore, the report also found no evidence that prices were being fixed or that market participants were engaging in any anti-competitive business practices.

The purpose of this report and the committee's recommendation was to increase the awareness of consumers regarding the dynamics of gasoline pricing and the competitive nature of Canada's petroleum industry. Members on this side of the House would agree that it is important to make information about the setting of gasoline prices widely available to the public.

However, we do not believe that an independent petroleum monitoring agency is necessary to accomplish this objective. Establishing a government agency charged with monitoring gasoline pricing may create a perception that the federal government is regulating gasoline prices. Retail price regulation is by and large the jurisdiction of provincial governments.

Also, current government activities, coupled with the data on gasoline prices collected and disseminated by the private sector and provincial governments, represent the most practical and cost effective means of raising consumer awareness about the competitive nature of Canada's gasoline industry.

Moreover, the Competition Bureau already exists to promote and maintain fair competition in all sectors of the economy, including the petroleum industry, by educating businesses and consumers, promoting compliance with the Competition Act and taking enforcement action when necessary.

In the past 15 years, the Competition Bureau has conducted five major investigations into allegations of collusion in the gasoline industry. The most recent one concluded in March of this year. Each time it found no evidence to suggest that a rapid rise in retail gasoline prices resulted from a national conspiracy to fix prices.

Establishing a gasoline monitoring agency will not do anything to further the objective of inspiring public confidence in Canada's competition framework.

That being said, we think this Parliament can do more for consumers than simply create a petroleum monitoring agency. That is why in November 2004 we tabled Bill C-19, an act to amend the Competition Act in Canada.

This bill represents a necessary step in strengthening Canada's competition framework so that it can adapt and respond to the rapid pace of economic change in the 21st century. By strengthening Canada's Competition Act, we can ensure that consumers have confidence not only in the competitiveness of the petroleum industry but in all sectors of the economy.

Bill C-19 follows extensive consultations with the public, including large and small businesses, consumer advocacy groups and legal and economic experts. The proposed legislation would provide concrete measures to address their concerns. Bill C-19 would give the Commissioner of Competition the authority to seek restitution for losses of consumers resulting from false or misleading advertising.

It also would increase the level of administrative monetary penalties imposed for deceptive marketing practices and introduce administrative monetary penalties to address the abuse of dominance in any industry, including all sectors of the petroleum industry.

This legislation would repeal the criminal pricing provisions dealing with price discrimination, geographic price discrimination, predatory pricing and promotional allowances. These pricing behaviours would be addressed under the abuse of dominance provision with the administrative monetary penalties.

The bill would also return the Competition Act to a law of general application by repealing the airline specific provisions of the act which were adopted in response to Air Canada's merger with Canadian Airlines. These measures are necessary to ensure that as an economy grows and evolves the Competition Bureau has the necessary tools and remedies at its disposal to effectively address the anti-competitive business conduct of industries and markets, and to encourage compliance with the Competition Act.

The motion before us proposes the government bring forward amendments to strengthen the Competition Act. As described, we have taken concrete steps to do exactly that. The motion proposes measures to ensure that the competition commissioner has the power to launch investigations, summon witnesses and ensure confidentiality.

We believe that the motion is proposing that the commissioner of competition be granted additional authority to conduct inquiries into the competitive nature of the market sectors where there is no reason to believe that the Competition Act has been breached.

While some of the stakeholders support allowing these types of general or market inquiries in recent national consultations, many raise serious concerns regarding these proposals, such as the types of procedures that would be used, the length of time they would take and how much they would cost.

The Competition Bureau is carefully examining the concerns raised by stakeholders regarding these market inquiries. Similar initiatives have found some support in jurisdictions, such as the United States, the United Kingdom, among others. The Competition Bureau is looking into the approaches taken by these countries to determine if these types of inquiries should be incorporated into our competition framework, while addressing the concerns of Canadian stakeholders.

We urge the members of this House to allow the Competition Bureau to complete its work on the issue so that we can ensure all proposed amendments to the Competition Act are carefully considered and well measured.

All factors taken into account, there is no evidence that a petroleum monitoring agency is needed or even desirable.

Furthermore, as the motion does not address the serious issues, such as jurisdiction of the provinces over gasoline pricing, and as we have already tabled Bill C-19, I urge all members of the House not to support the bill.

Budget Implementation Act, 2004, No. 2

[Bill Siksay, NDP, Burnaby—Douglas, BC]

Mr. Speaker, I am pleased to rise and speak to Bill C-33, an act to implement certain provisions of the budget tabled in Parliament on March 23, 2004.

I am pleased, but a little surprised that we are still dealing with last year's budget, particularly since we heard the budget for 2005 earlier this week. It was noted with some amusement by other members this morning when the Clerk called the debate on last year's budget. That is not to trivialize the importance of what is in this bill. Bill C-33 is a large bill that contains quite a number of measures and some of them are very important.

Bill C-33 contains a number of changes to other legislation.

Part 1 deals with amendments to the Air Travellers Security Charge Act to reduce the amounts charged to airline passengers under that act. It is probably a good thing to do, but I do have a general caveat around user fees.

When we put off the collective responsibility through our taxation system for things such as air travel security to user fees, it is a way of adding the tax burden on to individuals. We avoid our collective responsibility there. It is also a way of governments announcing tax cuts and then shuffling the real burden and increasing taxes in other very specific kinds of ways. It is not something that I generally support. I do raise a caveat about it, although reducing it I suppose is a good thing.

Part 2 of the bill amends the First Nations Goods and Services Tax Act to facilitate the establishment of taxation arrangements between the government of Quebec and interested aboriginal nations in Quebec. I hope that takes place. It is good to facilitate agreements between our governments and our aboriginal nations.

Part 3 of the bill has many changes around the Income Tax Act and related acts. These include things such as introducing a new disability support deduction and improving the recognition of medical expenses for caregivers.

Clearly, there are new measures in the new budget earlier this week to do better on those provisions. Probably what we are debating this morning did not go far enough and needed to be improved. In the more recent budget we have upped that, which is good. I suspect we could still go some way to improve the situation of people with disabilities and the people who care for those who have medical health problems.

The bill also addresses expanding the education tax credit to apply to the cost of an otherwise eligible course taken without any reimbursement in connection with an office or employment. It accelerates the 2005 increase in the small business deduction threshold to $300,000. There are a whole series of measures, including things such as limiting the period during which taxpayers may open up old income tax returns to 10 years, preventing the use of schemes to sell otherwise unusable charitable donation tax credits and introducing a new regulatory regime for registered charities. Those are some of the provisions in the bill. There is quite a number of measures in the bill.

There are many important things in the legislation.

One particular measure I want to talk about is something for which the New Democrats have been calling for a number of years. It is with some pleasure that it has finally sunk into the consciousness of the government and it appears in the legislation, and it appeared in the budget last year.

Hopefully not, but probably because we were coming up to an election and this was such a glaring example of a failure of government policy, the government took the opportunity to make this change. The change I want to talk about is the elimination of the deductibility of fines and penalties.

This glaring loophole of avoidance of responsibility and tax responsibilities has been raised a number of times over many years. Members in this corner of the House have over the years called the provision perverse, outrageous and absurd. I have to agree that it is perverse, outrageous and absurd that corporations could deduct fines for criminal activity or for environmental violations and chalk it up to the cost of doing business. Somehow that flies in the face of what a fine or a penalty is.

A fine or penalty tries to seek some kind of corrective action, not provide another opportunity for a deduction against corporate taxation or taxes to be paid. This is an incredibly important issue, so I am glad it is finally being addressed. However, I wonder why it took so long to do so.

Bill C-19 deals with amendments to the Competition Act and includes changes to the fines levied against corporations for a wide variety of anti-competitive offences. However, in the committee my colleague from Windsor West felt that it would be inappropriate to deal with the changes to the Competition Act before we dealt with the change to the taxation laws. The cart was being put before the horse. Thankfully, the committee was moved by that argument and agreed to put off consideration of the legislation until we dealt with this matter.

This is an important issue for the folks who are looking at the Competition Act. If the fines and levies in reference to anti-competitive offences do not have any real effect, then why deal with them. The committee made a good decision, and I am glad the NDP member for Windsor West raised the issue.

Some examples of the kinds of situations that this has led to are really absurd, perverse and outrageous, as I said earlier. One of those examples is a pharmaceutical company was fined $50 million in September 1999 for a variety of conspiracy offences related to the sale of some of its products. That company was able to deduct no less than $10 million or 21% of the fine from its total taxable income. It is unbelievable that somehow the penalty was turned to an advantage for this company. That it got any advantage from being fined for conspiracy related to the way it did its business is a crazy situation. Therefore, it is good that the legislation finally addresses this.

New Democrats have raised this. The member for Winnipeg Centre, the member for Windsor—Tecumseh, the member for Winnipeg North have all raised this issue over and over again, in 2002, 2003 and 2004. All pointed out the absurdity of this situation.

If I get a parking ticket, which I did a couple of weeks ago as I rushed off to an event and forgot to put money in the parking metre, I cannot deduct it from my income taxes. It is outrageous that a business or corporation can deduct fines it encounters in the misconduct of its business. To chalk up fines and offences that way should not be another cost of doing business. It is good that we are finally dealing with this. I cannot believe it took so long, but there is certainly some benefit to it, This has been a glaring example of some of the problems with our taxation system.

When I look back at the budget in 2004, I remember that budget seemed to be about tax cuts and debt reduction. The whole social deficit, the important social spending was ignored again in that budget. We did not need a year ago, just like we do not need now, budgets that ignore the important social issues and concerns, budgets that do not invest in the future of needs of Canadians to improve their quality of life.

The budget of last year was a blatant example of focusing almost entirely on tax cuts and debt reduction. I am glad we have seen a bit of a change this year with the most recent budget. At least there is some reflection that the government is in a minority position in the House and it took a broader perspective on the important needs of the country.

We found out last fall that the surplus projections of the government were completely wrong, which is a continuing trend. The surplus projections of the government have been wrong for a number of years in a row, and by whopping margins.

Last year the government predicted a surplus of $1.9 billion and in the end it turned out to be a $9.1 billion surplus. It shakes our confidence in the ability of the government to do the whole budgeting process. If it cannot get the figures right on what money is coming in, how can it make appropriate decisions about where that money should be spent and what the important expenditures are from year to year? How can the government determine appropriate priorities when it does not really know what is coming in?

Last year was a particularly blatant example of that where incredibly important needs of Canadians were ignored in the budget, yet as it turned out the numbers were based on a faulty projection of the surplus that year. The government could have done a lot more in the budget of 2004 than it did. I hope measures are in place to ensure that down the road it does not make those kinds of mistakes and that it can restore the confidence of Canadians in the budget process.

By focusing on debt reduction and tax cuts, important things were left out of the budget. The government promised for years to address the issue of child care, for instance, and last year's budget did not do that. Yet again for over a decade the promise of the Liberal government to deal with child care was missed. We know something not good enough happened this week, but at least it made it on to the list in this new situation in a minority government.

Last year's budget did not deal with the issue of housing. It did not deal with the issue of student debt. It did not really deal with the issue of poverty in Canada, of child poverty and families living in poverty. I want to talk a bit about some of those issues.

In my riding of Burnaby--Douglas, affordable housing is a crucial issue. During the last election, I campaigned hard on the fact that we needed more affordable housing in our community. Burnaby--Douglas had done very well back in the 1970s and 1980s when Canada had a national housing program. We did very well in terms of the kind of affordable housing which was built in our community. Co-op housing was a major component of our housing stock. Co-op housing is an excellent model of communities and people of mixed economic backgrounds living together and working together to maintain and manage their homes. It makes an incredible contribution to community life and to the overall community. There are a number of fabulous housing cooperatives in my riding.

We need a program like that and we still do not have it. We did not have it in the budget of 2004. We did not get it in the budget of 2005. I know some of my constituents are very disappointed that this did not happen. They know people in our riding are paying way too much for housing. People on the lower end of the economic scale are spending way too much of their available income to be housed in often substandard housing. We need better housing, more appropriate housing and affordable housing in our community.

I represent a community that is generally seen to be a fairly well off community, but the poverty in my community is very well hidden. Almost 30% of people in the city of Burnaby live in poverty. It is a tribute to the caring for people in the community which sometimes makes it appear invisible. This community, like all communities in Canada, has a crying need for more affordable housing. We did not get that in 2004 when more corporate tax cuts and debt reductions were the order of the day and investing in the future of Canadians fell by the wayside. Unfortunately, in 2005 it is the same story on affordable housing.

Students in my riding were really concerned about the budget in 2004. There were no measures in it to address the incredible $20,000 to $25,000 average debt loads that students face upon graduation. That limits the ability of students to undertake post-secondary education.

The cuts in transfer payments to the provinces which were made the Liberal government years ago, and which have not been restored, have forced up tuition fees, making post-secondary education unaffordable for many students and their families. That is a huge issue in my riding. Burnaby--Douglas has two fine post-secondary educational institutions: Simon Fraser University and the British Columbia Institute of Technology. We depend on students being able to attend those institutions. We want to ensure that they have access to them.

Families in my riding want to make sure that their children can get the best possible education so that they can succeed in life. That is very important to people in my riding. It is very important to new immigrant families in my riding. They very strongly believe in the importance of education and want to make sure that their children succeed in their new country.

This is an important issue. The 2004 budget did not deal with it. The 2005 budget dealt with one aspect. In the 2005 budget a student loan is forgiven if the student dies or is completely disabled. That hardly addresses the situation. It is a good measure, but students are literally dying to get help and the government is saying that they really do have to die before they get any assistance with their post-secondary education. That is not acceptable.

The Simon Fraser Student Society has decided to pursue this issue. It has been trying to be very creative about how it pursues the responsibility of the federal and the provincial government in British Columbia for post-secondary education.

Recently the society launched a complaint with the United Nations saying that both Canada and British Columbia are in violation of the United Nations International Covenant on Economic, Social and Cultural Rights which was approved back in 1976 and which Canada signed at that time. Article 13 of the agreement calls for the progressive introduction of free education as a means to achieving equal access for all.

I think everyone in the House knows that we have been going in the opposite direction on free education. Education is becoming increasingly expensive. Tuition rates have gone up 75% to 150% in British Columbia. A significant part of the reason is that the federal government cut the transfers to provinces for post-secondary education.

I am proud that the previous NDP government in British Columbia put a freeze on tuition fees during its term so that students did not face ever increasing tuition fees. The NDP put on that freeze in the face of the decrease in transfer payments, the shortfall in money that the province received from the federal government. The B.C. government made education and health care a priority during the difficult period when funding from the federal government was cut because of the social transfer payment cuts to the provinces.

I am proud that the New Democrats held the line on that. As soon as the NDP was out of government and the Liberals were back in, tuition fees shot up dramatically. That is an unacceptable situation.

I strongly support the Simon Fraser Student Society in its attempt to bring attention to Canada's failure to move toward free education and improved accessibility to education. It is a very important issue and one on which Canada should be leading the world, not struggling to catch up with other countries that are making important strides in this area.

Last year's budget and this year's budget have done little for people living in poverty in Canada. We have heard how EI continues to suck money from workers and employers, but it is not being put back into programs for workers in Canada. We need to reduce the threshold for qualifying to 360 hours from 720 hours. That change is long overdue. The money is there to do it. There is no excuse. That move would go a long way to reducing poverty for families and children in Canada. EI is not just an insurance program; it is a key part to reducing poverty in this country.

The new budget increases the basic personal tax exemption. That is touted as a measure to help low income Canadians. I suppose it provides a small measure of support for those people, although it is hard to imagine how somebody who is only earning $11,000 a year should be paying any income tax. It is a very small measure. Unfortunately, proportionally it benefits high income Canadians far more than it benefits low income Canadians. We need to target our tax measures a little more carefully around eliminating poverty than we have been doing.

Mr. Speaker, I see you are indicating that I should be wrapping up my speech. I will say it has been interesting to speak to last year's budget when we are already dealing with the budget for the coming year. It is time to get on with it.

I am glad that finally after years of pressure from New Democrats in this corner of the House the government has finally sought to eliminate the deductibility of fines and penalties. That is a good part of the bill. With that I will close my remarks.

Gasoline Prices

[Paddy Torsney, Liberal, Burlington, ON]

Then, Mr. Speaker, I would encourage members to look at the changes to the Competition Act that are currently proposed by the Minister of Industry. These are important changes which will make sure that we have the best possible Competition Act, because it is in industry's favour to make sure that it is being held to the highest standards. More important, it is in Canadians' and consumers' favour to make sure we have a Competition Act that serves the interest of consumers in Canada and makes sure they have the safeguards to protect their rights.

This proposal should be considered by the Standing Committee on Industry, Natural Resources, Science and Technology during the hearings on Bill C-19, but until the research is done and the possible implications are clearly understood I do not think the motion before the House today should be supported.

[Paddy Torsney, Liberal, Parliamentary Secretary to the Minister of International Cooperation]

Mr. Speaker, I am thankful for the opportunity brought forward by Motion No. 165 to address the issues of competition, particularly in the gasoline sector.

The second part of the member's motion proposes that the government bring forward amendments to strengthen the Competition Act, including measures to ensure that the competition commissioner has the power to launch investigations, summon witnesses and ensure confidentiality.

The challenge of the motion, of course, is that it is not at all clear what kind of amendments it is proposing. While it proposes amendments to strengthen the Competition Act and provide some non-inclusive list of examples, these examples refer to powers that already rest with the Commissioner of Competition.

Currently, as the member for Edmonton—Leduc has identified, if the commissioner has reason to believe that an offence has been committed under the Competition Act or that grounds exist for the making of a remedial order by the Competition Tribunal, she can, subject to some qualifications, “launch investigations, summon witnesses and ensure confidentiality”.

In the past, some members of the Bloc Québécois publicly indicated that they wanted to amend the Competition Act so that the Commissioner of Competition would have the power to conduct inquiries into markets and examine competition issues even if there was no reason to believe that an offence had been committed. I have some problems with that.

A study of the gasoline industry, which has been cited by some Bloc Québécois members, is an example of when such a power would be useful. Since the introduction of the motion refers to gasoline specifically, the member must realize that the issues they address would apply in a more general nature to the entire market and the potential for the commissioner to launch investigations in all areas of competition.

The first issue raised that must be addressed is that while some competition authorities in other countries, such as the U.S. and the U.K., found that these kinds of general or market inquiries were useful tools that we should look at that, I really think there needs to be appropriate checks and balances.

In the 1980s, for instance, a gasoline study was conducted by the Restrictive Trade Practices Commission in Canada. It gathered over 200 witnesses and the study took five years to complete. This has enormous cost implications for all of us.

I would also suggest that the example of the gasoline inquiry highlights the need for safeguards that could help ensure that the inquiries are initiated only when there is information suggesting legitimate competition issues that could be addressed by the inquiry.

While the member opposite has suggested that there is some kind of collusion going on between the Conservatives and the Liberals on this issue, let me say that the member for Edmonton—Leduc and I sat on a committee. The committee wrote a report to which I would refer the member opposite. All of us sat around the table and none of us got together out of some kind of crazed idea of colluding, but in fact because we had studied this issue and examined the facts.

There have been many studies on gasoline prices and all have concluded so far that there is no evidence of price fixing or other types of anti-competitive conduct that would substantially lessen competition.

The report that I referred to entitled “Gasoline Prices in Canada” by the Standing Committee on Industry, Science and Technology in November 2003 represents one of the most recent studies. In our report, the committee indicated that it was satisfied that the Competition Bureau was adequately overseeing competitive aspects of the petroleum industry. Based on information, as the member opposite has suggested, from the International Energy Agency, Canada's retail gasoline prices have consistently compared favourably to other major industrialized nations.

This brings me to a second issue. I am always concerned about any cost inputs to any aspect of Canadian industry. I am concerned when gas prices go up and small business operators who have to deal with high input costs have to face these issues, but let us also look at the other side of this. Sometimes higher gas prices help people look at other options, like public transit.

One of the more recent blips in gasoline prices, I read with astonishment, is that young are making absurd claims in the newspaper like, “At this rate it hardly justifies having a car”.

However, maybe people do need to think about the choices they make. If somehow the change in gasoline prices makes people think twice and makes them wonder about buying an energy efficient car or taking public transit, I would be quite excited about that. I just bought a hybrid and I am happy with my car choice because it is showing by example. I bought the Honda Accord hybrid and of course Honda has a vibrant plant in Ontario.

I would also draw the attention of the members opposite to Bill C-19, an act to amend the Competition Act and to make consequential amendments to other acts. The bill, already before the House, followed extensive national consultations conducted by the Public Policy Forum, an independent non-profit organization that the government hired to look into this issue. The consultations proved very useful and helped provide a well thought out and balanced package of legislative amendments that addresses the interests of consumers as well as those of small and large businesses.

Mr. Speaker, in the spirit of cooperation could I just seek clarification? If I sit down, does the member opposite get to make a concluding statement?

[David McGuinty, Liberal, Ottawa South, ON]

Mr. Speaker, I thank the member opposite for bringing forward his private member's motion. It is a noble effort, and I would like to speak to it today in two parts.

First, I would like to address Motion No. 165 by addressing the notion of a petroleum monitoring agency. This first proposal calls for the creation of a petroleum monitoring agency that would prepare an annual report on all aspects of the petroleum industry for consideration by the Standing Committee on Industry, Natural Resources, Science and Technology.

The proposal is very similar to a recommendation made by the former Standing Committee on Industry, Science and Technology in November of 2003, at the conclusion of its report on gasoline prices in Canada. The committee's recommendation, however, at that time specifically indicated that a primary role of the agency should be to collect and disseminate pricing data, by removing specific reference to the collection and dissemination of pricing data and by replacing it with a mandate to report “on all aspects of the industry, including how prices are set and competition issues”. The motion suggests an even larger role for a new agency.

Further to this last point, I should note that the committee's report concluded:

In terms of federal government action, the Committee is satisfied that the Competition Bureau has sufficient powers, personnel and resources devoted to overseeing competitive aspects of the petroleum industry.

Based on this finding, I have to ask, why do we need an agency with an expanded mandate to report annually “on all aspects of the industry, including how prices are set and competition issues?”

In particular, in its report on gasoline pricing in Canada, the Standing Committee on Industry, Science and Technology examined a significant increase in the price of gasoline that took place over several months. It found that the price increase:

--was the result of industry participants’ competitive reactions to a series of international crises and the abnormally cold weather that gripped northeast North America last winter. No evidence was presented to the Committee of a conspiracy to raise and fix prices, nor was there evidence presented of abusive behaviour on the part of vertically integrated suppliers in the form of squeezing retail margins to eliminate or discipline independent retailers.

In its response to the committee's report on gasoline prices in Canada, the Government of Canada indicated that it had given careful consideration to the recommendation concerning the creation of a petroleum monitoring agency. Still the government concluded that current activities undertaken by federal and provincial governments or agencies, combined with information collected and widely distributed by the private sector, “provide the most practical and cost-effective method of informing the consumer”.

In summary, there is no evidence to suggest that the creation of a new petroleum monitoring agency, with its inevitable costs, is needed.

Let me turn secondly then to the bill's call for amendments to the Competition Act. The second part of the motion proposes that the government should bring:

forward amendments to strengthen the Competition Act, including measures to ensure that the Competition Commissioner has the power to launch investigations, summon witnesses and ensure confidentiality.

The government indicated in the throne speech that it was committed to providing an up to date legislative framework for business, and that it would propose changes to amend the Competition Act.

The government has already acted on the latter commitment. Bill C-19, an act to amend the Competition Act and to make consequential amendments to other acts, was tabled in early November of 2004, and referred to the Standing Committee on Industry, Natural Resources, Science and Technology on November 16. The proposed legislation follows extensive consultations with a wide range of stakeholders, large and small businesses, consumers, consumer groups, economists and legal experts to help ensure that the proposed amendments will contribute to a modern competition regime in Canada.

The proposed legislation, which is consistent with the recommendations made by the Standing Committee on Industry, Science and Technology in 2002, includes the following actions.

First, it gives the Commissioner of Competition the authority to seek restitution for consumer loss resulting from false or misleading representations. This will encourage companies to be accurate in their claims. It will allow consumers to get up to the amount paid if they have been duped by false claims.

Second, it introduces a general administrative monetary penalty provision for abuse of dominance in any industry. Currently, with the exception of airlines, the main consequence for abuse of dominance is simply an order from the Competition Tribunal requiring an end to the practice. Under exceptional circumstances, a structural change, such as divestiture, may be required. This amendment represents an additional tool to ensure compliance with the Competition Act.

Third, the legislation also removes airline specific provisions from the act to return it to a law of general application.

Fourth, finally it decriminalizes the pricing provisions dealing with price discrimination, regional price discrimination, predatory pricing and promotional allowances, so they can be dealt with under a civil regime, and this is very important, and the abuse of dominant position provisions of the Competition Act. This means that conduct like predatory pricing will receive the benefit of a full hearing on its likely economic effect. Cases will also be assessed by the Competition Tribunal with a lower civil burden of proof compared to the former criminal burden of proof.

The motion before us is not clear. It does not describe what amendments are being proposed, other than amendments to strengthen the Competition Act.

Let us look at the facts. The Commissioner can currently initiate inquiries if there is reason to believe that an offence has been committed or that grounds exist for the making of a remedial order by the Competition Tribunal. The Commissioner can summon witnesses, subject to judicial authorization; and the Commissioner must keep information confidential pursuant to section 29 of the Competition Act.

While not clear, Motion No. 165 may be referring to a suggestion that the Commissioner should have the power to conduct inquiries into markets or industry practices, even if there is no reason to believe that an offence has been committed when significant competition issues have been raised.

Other members of the Bloc Québécois have publicly indicated that this would represent an improvement to the Competition Act, and have cited a study of the gasoline industry as an example of why such powers are needed.

However, this is the government's experience. Recent nationwide consultations on various options to strengthen the Competition Act included a proposal to allow the Commissioner to ask an independent body, such as the Canadian International Trade Tribunal, to inquire into the state of competition and the functioning of markets in any sector of the Canadian economy. While some stakeholders supported the idea of market or general inquiries, many stakeholders raised strong objections to this proposal.

Serious concerns were raised with respect to procedures, length of time that these types of inquiries typically take and substantial costs likely to be incurred by both government and businesses in inquiries of this nature.

It is my understanding that in response to these concerns, the Competition Bureau is now presently examining the approaches used in other jurisdictions on a comparative basis that have general inquiry powers for competition related issues.

This brings me to my final point. The Competition Act, which dates back to 1889, is legislation of general application which provides a framework within which business can operate. It is important to approach changes to it with very careful consideration and to fully understand the possible implications of proposed amendments. There is no evidence indicating that a petroleum monitoring agency is needed.

Second, if the motion refers to general or market inquiries, I understand that more work is currently being undertaken by the Competition Bureau to resolve issues raised by stakeholders during consultations.

Budget Implementation Act, 2004, No. 2

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, it is my pleasure to rise today in the House to speak to Bill C-33, the budget implementation act. It is very important to look at a number of issues in the bill. There were a lot of issues that went to committee. I know that there is much interest in deciding what is going to happen with our economy. There were great presentations by hundreds of Canadians who submitted documents. It is important to note, though, that a couple of elements make this legislation very significant.

I am going to focus my remarks on a couple of elements, because I believe they deserve some attention and should be noted in this debate at second reading. One of them is an element that should be closed as it is something that is atrocious: the allowing, in business tax deductions, of fines and penalties to be tax deductible. That is going to be closed.

The second relates to the issue of infrastructure in our communities and our nation. I again will discuss, as I have many times, issues related to the crossing at Windsor--Detroit. I will certainly discuss some of the things that are happening now but also how this relates to our budgetary process. That is a moving target; there are a lot of things changing on a regular basis.

First I want to highlight some of the positive things that we New Democrats were very pleased to see in the budget bill. One in particular is the introduction of the closing of that loophole I mentioned, that gap.

It is hard for Canadians to believe this. A corporation could go to court and be convicted of a criminal offence related to polluting the environment, conspiracy related to market practices and a number of serious elements that are predatory not only to Canadian taxpayers but also to other businesses. The government would then go through the process, there would be a review, charges would be laid and a judgment cast. At the end of the day, behind closed doors, an accountant could then deduct those fines and penalties as a tax break.

It is amazing that the process to get here was so difficult. As New Democrats, we want to make this chamber work and we have been doing that in a number of different initiatives. This was very difficult to push through at the end, but I think it is important to talk about the first part of that process.

I do want to recognize the member for Winnipeg Centre, who pioneered this fight. This fight goes back to a time before I was elected to the House of Commons. It goes back to the member's comments in the House of Commons. I will read that question to the House. It will be shocking for Canadians to learn that there was no response until 2005, when we pressured the government to close the loophole:

Mr. Speaker, I cannot deduct my traffic tickets from my income tax yet a recent court ruling says that businesses can deduct fines, penalties and levies as a legitimate business expense. I find this outrageous. Will the Minister of National Revenue agree that it undermines the deterrent value of a fine if a company can write it off as a tax deduction?

That was said by the member for Winnipeg Centre in May 2002.

What we are talking about is the decision that it is a legitimate business expense to poison our water, a legitimate business expense to practice predatory behaviour that costs other Canadians jobs because their company might play by the rules, whether it is safety or product information that is valid as opposed to unfair advertising or practising predatory behaviour on consumers. These fines were a legitimate business expense and could be deducted.

We have not done all the research on this, but we know it has cost us tens of millions of dollars each year. One of the fines that was levied was for $50 million. It was a joint issue related to drug companies that were fined for conspiracy related to bulk vitamins. There were several companies involved. We estimate that from that $50 million they could have had $10 million of taxpayers' money coming back to them. It is a crime that this type of practice was allowed.

When the member for Winnipeg Centre brought this to the government's attention, nothing was done. In fact, he followed that up with this question back in 2002, about six months later:

Mr. Speaker, six months ago I asked the revenue minister to plug the tax loophole that allows businesses to deduct fines and penalties from their income tax as a business expense. Since when is breaking the law supposed to be tax deductible?

It is unbelievable that we still had no movement even then.

We continue to fight as New Democrats on this issue. We continue to raise the consciences of Canadians and make them aware that for this coming tax year they will not be able to deduct fines and penalties. At the same time, Canadians were having to pay more because the government was shovelling the money back to the people who had gone to court, lost a case and had been fined, penalized or had a levy placed upon them. We would shovel money back behind the scenes to them because they had good accountants and because there was no progress made on this file.

What happened here in the House of Commons is unbelievable. The government at the industry committee then introduced Bill C-19 which looked at increasing administrative monetary penalties but still did not fix the loophole.

I was pleased to introduce a motion at the industry committee to suspend deliberations and discussions on Bill C-19 until this gap was plugged. What was amazing was that we found out the legislation to fix this gap, which was again one of the promises in the Speech from the Throne that never reached fruition, was ready but the government refused to introduce the elements to actually cast the last completion to fix this loophole. It was sitting on a shelf gathering dust.

The motion passed, and I must give credit to the Conservative Party of Canada which supported the motion. Although the Conservatives did not necessarily agree with my position that tax deductions on fines, penalties and levies should not be tax deductible, they said that they were quite clear on that but that they were not fully convinced that was their thing. However they said that a promise was made by the government in the Speech from the Throne, that New Democrats had been raising the issue and that the promise should be honoured. The Conservatives were straight up and I give them credit for that. They have accountability. The Bloc Québécois supported it as well.

Do members know what happened? The Liberals on the committee stormed out of the meeting after we got the suspension. I will give credit to the Liberal chair of the committee who did a good job of handling the situation, handling the committee and making sure that we were working together in a non-partisan way. He was also very much interested in a dialoguing with me to get this moving, which was very important.

A week and a half later the government did introduce Bill C-33 and made sure the amendment was in the bill. We then came back to the House of Commons after the break and we are now in the final stages of the bill.

It is because of that that I kept my word as well and in committee this week we agreed to put Bill C-19 back on the table, which is how Parliament should work.

I do not understand why we had to drag the government kicking and screaming to end something that was so egregious for Canadian citizens. Once again I have to say that the member for Winnipeg Centre should be commended for pioneering this fight. It not only has an implication on individuals and the money they will save as taxpayers that will not be shovelled back to people that break the law, it will also set the record straight that if people are going to pollute, if they are going to use predatory practices that affect consumers and other Canadians and they are caught, they will be fined and not be able to get that money back through the back door. This sets an example.

We have seen a couple of vivid examples in the last few days where a special investigation unit of the RCMP has been out on Bay Street with a big van outside offices and securing records because of the potential problems on Bay Street. This is another issue that was behind the scenes. We did not have the van, but unethical practices were happening through the shuffling of paper that at least as Canadians we can say will be completed and finished. We are very proud to be part of that.

The budget is a very important document in terms of the way in which the process is developed and the promises that are made and things that are laid out later.

Another issue that is evolving right now is the importance of recognizing the decisions being made by this nation regarding infrastructure and investment that has already cost us a lot of money.

Forty-two percent of the nation's trade goes through the Windsor-Detroit border. At the present time there is a rail tunnel with a small load capacity which is not being used much right now because it has only a single stack and it needs a double stack to be more efficient. There is a tunnel for cars and trucks but it is predominantly trucks that use it. There is a ferry crossing and there is the Ambassador Bridge. These elements span about two kilometre's over the Detroit River. Forty-two percent of our nation's trade goes along those two kilometres.

The city and county councils of the day have just released a constructive plan from the Schwartz report. The community has struggled a great deal to find a solution to the gridlock and to ensure the proper infrastructure is in place. Many different community groups have been seeking solutions to this gridlock because it not only has an impact on the air quality, it also has an impact on the community in terms of travelling from the east side of the city to the west side. It is also having an impact on international trade and is prohibiting business development in the community.

The city has come up with a consensus on the problem but it is a problem that requires infrastructure dollars. I will remind the House that the Prime Minister promised that he would look for a solution but that he would not impose anything on the City of Windsor. What the Prime Minister needs to understand is that words are not good enough. Any action that has to be taken must also come with the resources.

After many months of study the Schwartz report is finally finished and now we have the bureaucrats suggesting that it might or might not work. That is not good enough. We were told that appropriate resources would be provided for this.

Let me put the importance of 42% of the nation's trade going through this corridor into context. There has been no infrastructure investment of any significant magnitude in this corridor since NAFTA. Despite all the growth, despite the years and years of warnings from the councils to the former minister of finance, now the Prime Minister, and finance ministers after him, and despite all the county and city resolutions, no action has yet been taken.

As a result, a report was released this year from the Michigan department of transportation that calculates that this year alone the Canadian economy lost $18 billion from delays at the border; double the surplus. We know that the auto plants and parts manufacturers are coming up with other options because of this infrastructure deficiency.

It is interesting to note that the city came back with a consensus report. What had happened was that the federal Liberal government, along with the provincial Conservative government at that time, behind closed doors, attempted to impose something on the community called a nine point plan. They tried to shovel taxpayer dollars to private companies to promote their advancement of solutions that would not work and had no modelling or grounding as solutions.

Our community fought that plan. We exposed its weakness not only in the planning but in the process. The governments had breached the trust of every resident of the city. There was no solution. They were just trying to seek taxpayer dollars. The city was asked to come up with a solution so it hired the brightest traffic guru in North America, Sam Schwartz, a former New York City traffic commissioner, to do a study and come up with a report, which he did. They have consensus for the first time. The warden and the mayor deserve credit for that.

It is not the perfect solution that I would have liked, nor is it everything I was seeking, but it is something. It actually has traffic modelling and it has an actual plan that is multi-model, that will carry the day and that will rebuild confidence.

However the plan will cost money. It has been estimated that it will cost about $1 billion to carry out that plan. Nothing is wrong with that because $18 billion was just lost last year and it will be lost again this year. I can tell members that if the resources are not there, the communities of Windsor and Essex county will fight something being imposed on them. If somebody else wants to impose something that does not support what the community has asked and advocated for, the timelines better be built in for what we are going to do to protect our community to make sure that it is a healthy and vibrant city, not only for raising families but also for economic development. That is important to note.

Once again the word of the Prime Minister and others was that they would be there. In fact just recently in the House of Commons the Parliamentary Secretary to the Minister of Finance said they would be there when I asked a question. Well they had better be there. We see stories though that give me concern. The Windsor Star reads:

Border money up in air--Federal and provincial politicians will decide within "a few weeks" how much funding will be provided and when construction will begin on the next phase of improvements to fix Windsor's border traffic problems.

That is fine, but I have not heard the political leadership say that the money will be there.

What is interesting about all of this is that on the U.S. side the Americans do not seem to have that problem. I will quote Paul Cellucci:

Cellucci urges border decision: Ambassador says U.S. may split costs:"U.S. Ambassador Paul Cellucci says Washington wants quick approval of a new border crossing between Windsor and Detroit and suggested the U.S. is prepared to split the cost.

He noted Canada and the U.S. have worked out a 50/50 cost-sharing formula to pay for a new bridge being built between New Brunswick and Maine, saying this could be the model for the new crossing under study in Windsor and Detroit to relieve the logjams that plague the countries' busiest border crossing.”

What is amazing and what is not talked about often enough is the fact that this corridor, with 42% of our nation's trade, the busiest and most important corridor that we have, has no coordinating body despite four crossings to get the trucks, people, cars and goods and services across the two kilometres. It is not done like that in Fort Erie. It is not done like that in Niagara Falls. It is not done like that in Sarnia. They have a border authority or a public commission. They at least have something that helps coordinate the long term development of the region, the traffic management, the flow and the infrastructure.

With all the changing legislation coming from the United States, it is more important today because just as important as infrastructure is legislation, programming, staff and technology to move the border traffic through at a good rate.

Why is that not being done in Windsor? Why is it that we are going to let 42% of our nation's trade hang in the balance of chaos and no coordination? Part of the reason is that unlike everywhere else, except for one other place, 24 crossings, which are tunnels and bridges, are held by the public sector. Two crossings are held by the private sector: the Ambassador Bridge and Fort Frances. The other ones are usually owned by state, provincial or sometimes municipal governments. In Windsor our tunnel pays a revenue and a dividend back to the people to relieve taxes as opposed to filling somebody else's pocket.

However in Windsor there has been no comment by the government to date as to whether it will fund the next crossing, which is incredible because we are going to let 42% of our nation's trade become a business for someone to usurp the profits of the auto industry, the agricultural industry and people crossing on a daily basis, as opposed to saying that it is a social and economic conduit between our two nations that should not be a profiteering model, not off the backs of industry and not off the backs of people. It is an important connection link between our two countries.

Those moneys for the border could go toward a solution for the future so that we will not have to dig back and try to find money. This should be done properly. I do not understand why we have been left in this situation. I cannot understand why we would let 42% of our nation's trade be thrown up in the air for the interests of a few as opposed to the benefits of many.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, here we are again speaking on the legislation to implement the budget of last year. We have a chance to reflect on the past and make connections to the present process involving prebudget consultations for the next budget. I think the timing is good. It is time to reflect on the past and look to the future.

I want to address one very important issue in Bill C-33. There are many issues to touch on. If one looks at the overall summary of this bill, we are dealing with a couple of dozen specific changes to the Income Tax Act, the First Nations Goods and Services Tax Act, the Air Travellers Security Charge Act, and other statutes as indicated.

There is one recommendation in this package that must be singled out. It is a symbol of an obvious glaring loophole, of a wrong that is in our system today. It took an enormous amount of pressure on the part of members in the House to have corrected. There is one line in Bill C-33 under the summary that says “eliminate the deductibility of fines and penalties”. The words say it all, do they not?

Finally, the government is recognizing the importance of eliminating the fact that one can deduct fines charged against a person from his or her income tax. It is hard to believe in this day and age, is it not? It is hard to believe that up until this very moment it was possible to deduct fines and penalties accrued for wrongdoing because to do so there was a tax benefit from that kind of wrongdoing.

Indeed, we might not even be here today addressing this issue or even debating this bill except for the determination of New Democrats. People will know that many New Democrats have pursued this issue in Parliament in different ways from different vantage points and on numerous occasions.

I want to reference the work of my colleague, the member for Windsor West, who out of concern to finally put an end to the rewarding of corporate corruption with tax deductions initiated the following motion at the Standing Committee for Industry, Natural Resources, Science and Technology. His motion stated:

That this Committee suspend hearings of Bill C-19 until the Government introduces its proposed amendments to the Income Tax Act Section 18 (1) (a) allowing the deduction of fines as a business expense into the House of Commons and Second Reading is completed on the proposed amendments.

Members will know that Bill C-19, which is an act to amend the Competition Act, includes changes to the fines levied against corporations for a wide variety of anti-competitive offences. My colleague from Windsor West felt that dealing with those changes before an outstanding question of deductibility of fines was settled once and for all was putting the legislative cart before the horse. Interestingly, the committee agreed.

Miraculously, here we are debating this long overdue budget implementation issue today instead of some time in the new year. I think it is worth acknowledging the hard work of my colleague from Windsor West and congratulating him for this initiative.

As I said, we have been pressing the government to address this issue for some time. We have been pushing hard to convince this Liberal administration to stop allowing the deduction for corporate fines and penalties. Naturally, we have been appalled, as most Canadians have been, as corporations guilty of any number of offences walk away with a backhanded sort of reward for their wrongdoing.

First Nations Fiscal and Statistical Management Act

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, I am pleased to speak to Bill C-20, the First Nations Fiscal and Statistical Management Act.

Like my colleague from Louis-Saint-Laurent—the Bloc Québécois Indian Affairs and Northern Development critic—who also delivered a speech at second reading on November 19 in favour of this bill, I agree with this act to provide for real property taxation powers of first nations, to create a First Nations Tax Commission, First Nations Financial Management Board, First Nations Finance Authority and First Nations Statistical Institute and to make consequential amendments to other Acts.

This bill essentially provides the first nations with financial management tools. Like many other bills, the bill being presented to this House today is not perfect, but it could help in creating a environment that would help first nations to assume their financial independence.

It was very important for us to support this bill to help the first nations to assume a certain financial independence or least much more than they had in the past.

I sit on the Standing Committee on Aboriginal Affairs, Northern Development and Natural Resources with the hon. member for Louis-Saint-Laurent, and we heard from a number of first nations officials, who supported this bill, not to mention those whom we met privately, as part of our parliamentarian duties.

Everyone knows that the Bloc Québécois cares about the self-government claims of the aboriginals, since we too have many such claims in Quebec. In fact, we prefer the term “sovereignist”. In our opinion, true self-government is achieved when a nation controls all of its economic levers. First nations that will avail themselves of the services provided under Bill C-20 will be able to play a more active role in their economy and promote private investments on their territory. This legislation will give first nations access to tools that are already available to other levels of government and in turn access to financial markets, among other things.

However, we warn the federal government not to succumb to the temptation of using Bill C-20 to opt out of its fiduciary responsibilities towards aboriginal people. It remains the government's job to address inequality between aboriginals and non-aboriginals. I can assure the government that we will keep a close watch.

For the benefit of the public and of those members who may not be very familiar with the bill, I should mention this legislation proposes the establishment of four financial institutions. I will explain them briefly.

The first one is the first nations tax commission, which will replace the Indian taxation advisory board. It will be responsible for the property tax rule approval process, and its streamlining will also help strike a fair balance between the interests of the community and those of taxpayers, when rates are set.

The second institution is the first nations financial management board. The board will set financial standards and provide the independent and professional property assessment services required by first nations that want to take advantage of the borrowing pool of the first nations finance authority.

The third institution, namely the first nations finance authority, will help first nations communities that will adhere to the legislative scheme to issue securities collectively and to raise long term capital at preferential rates for highways, water supply systems, sewers and, of course, other infrastructure projects.

Finally, the first nations statistical institute will help all first nations communities to meet their local data needs, while encouraging participation in Statistics Canada's integrated national systems and their use.

The establishment of a new financial relationship between the federal government and the first nations is nothing new. Already in 1983, the Penner report, a report by the special parliamentary committee on aboriginal self-government, recommended that the fiscal relationship between the federal government and the first nations be redefined. The Royal Commission on Aboriginal Peoples made the same recommendation in 1996. Bill C-20 is a step along the road toward greater economic autonomy for first nations.

Here is a brief historical overview of Bill C-20. Before it established a supervisory structure to administer the new legislation, the Department of Indian Affairs and Northern Development created the Indian Taxation Advisory Board in early 1989. In September 2003, 107 first nations began to tax real property. After the Kamloops amendments, in 1988, if I am not mistaken, a number of events strengthened the existing support for the restructuring of financial relations between the first nations and the federal government.

In 1991, the Department of Finance undertook a review of its policy on Indian taxation and, in 1993, made public the Working Paper on Indian Government Taxation.

In 1995, the First Nations Financial Institute or FNFI was created and, at the instigation of the Westbank First Nation, it was then federally incorporated. The main objective of the FNFI was to provide investment opportunities to first nations in order to ensure long-term financing of their public debt. With the adoption of Bill C-20, the FNFI will become the First Nations Finance Authority, which was discussed a bit earlier in this debate.

In 1995, a round table of representatives from the Department of Finance and the Assembly of First Nations led to the adoption of a resolution on taxation. The following year, the participants at the annual general meeting of the Assembly of First Nations adopted resolution 5/96 supporting the establishment, between the first nations governments and the Government of Canada, of new fiscal relationships based on the principles of flexibility, equity, choice, the assurance of government services comparable to those provided by other governments, economic incentives and efficiency.

The Chiefs' Committee on Fiscal Relations was created two years later to review fiscal relations between first nation governments and the federal government. That is known as resolution 49/98 of the general assembly. It recommended the establishment of first nations financial institutions. In 1999, the Assembly of First Nations expressed its support for this initiative when participants in its annual general meeting supported the creation of the first nations financial authority, and backed the Indian Taxation Advisory Board's efforts to establish the first nations tax commission. Those are known as resolutions 6/99 and 7/99 respectively.

In December of the same year, the federal government and the Assembly of First Nations signed a memorandum of understanding concerning the creation of a national round table on financial relationships, with the objective of establishing solid bases for these relationships through an exchange of information, capacity building and the establishment of benchmarks.

In 2000—we are getting closer—the Assembly of First Nations maintained its support for the creation of the first nations statistical institute and the first nations financial management board, pursuant to resolutions 5/2000 and 6/2000 of the Confederacy of Indian Nations. The general assembly then passed resolution 24/2001 supporting the recommendation by the chiefs' committee regarding the establishment of the four new first nations financial institutions by federal legislation. The legal validity of this resolution was questioned, however, since some people thought that it had not received the support of 60% of those present required, as we know, under the charter of the Assembly of First Nations.

On August 15, 2002, the Minister of Indian Affairs and Northern Development released a draft bill with the intent to carry out public consultations before introducing it in the House. Several first nations then raised deep concerns with the way the bill was written. Of course, the Bloc Québécois shared these same concerns.

As a result, the AFN convened a special chiefs assembly in November 2002 and passed a resolution rejecting the proposed first nations fiscal and statistical management bill. According to Resolution 30/2002, the proposed legislation violated the historic nation to nation relationship, infringed upon aboriginal and treaty rights, and was otherwise so flawed that it could not be corrected by mere amendments.

An additional so-called accommodation resolution was also passed, that is AFN Resolution 31/2002 respecting the right of those first nations to enter into local and regional agreements, but not in the context of national legislation.

On December 2, 2002, the Minister of Indian Affairs and Northern Development tabled Bill C-19 on first nations fiscal and statistical management in the House of Commons. That bill, which died on the Order Paper in November 2003, was reinstated as Bill C-23 on March 10, 2004. That bill also died on the Order Paper after third reading. It was reintroduced very recently, on November 2, 2004, with some significant changes. We are debating this new Bill C-20 today, after studying it for not too long, but, say, carefully in committee.

However, former Bills C-19 and Bill C-23 were unacceptable both to us and to first nations. We had concerns about the fact that the act could work against aboriginal rights and reduce the federal government's fiduciary obligations toward the first nations. We were also concerned that the institutions would only serve a few first nations.

Bill C-23, for example, like the Indian Act, delegated tax authority to first nations communities, which came down to making aboriginal governments municipal entities, if you will, when their legitimate desire was to enjoy greater financial autonomy.

Moreover, the preamble to Bill C-20 uses language that reflects the government's strongly municipal approach to the first nations.

With respect to Bill C-19, we had a number of critical comments. First, the definition of “specific claims” was too narrow. Access to the tribunal was nearly impossible; the $7 million ceiling excluded most claims. Neither the commission nor the tribunal were independent or impartial. The minister had the power to accept or reject claims. Finally, there was doubt about the impartiality and flexibility of the process.

Fortunately, two very important changes have been made in the bill before us today. First, a schedule was added to ensure that the legislation applies to those first nations who wish to participate, because participation is optional, something we feel is very important. Second, a non-derogation clause was included to protect the aboriginal and treaty rights of all first nations.

These changes ensure consistency with the Charter of the Assembly of First Nations as well as the principles of self-determination, the approach taken by the first nations, and the optionality provided for in recent resolutions of the Assembly of First Nations, which were passed in Saskatoon and ratified again in Charlottetown.

This economic disparity exists because some lands do not have services, investors are uncertain and the cost of starting a business is still too high.

A backgrounder produced by the First Nations Fiscal Institutions Initiative says that a dollar of first nation tax revenue buys 30% to 50% less in capital works than it does for other governments. The problem lies primarily in the legislative and institutional framework.

For 130 years, the Indian Act has perpetuated this state of affairs, this lack of fairness. It has prevented first nations from creating their own institutions and participating in the economy.

Will Bill C-20 completely correct this situation? No, but we think it is a step in the right direction, as long, of course, as the federal government does not use this bill as a means to opt out of its financial obligations with respect to the first nations. I repeat, the government has a fiduciary obligation to the aboriginal peoples and it cannot opt out of that.

There are so many things to improve in the living conditions of the first nations that they will not be settled by this bill, but only through real political will exercised by the current government.

Housing conditions, education and health are inferior compared to the rest of the population. On the reserves, 65% of families live in substandard housing. The Bloc Québécois is deeply concerned about the fact that the lack of adequate, affordable housing for aboriginals has implications beyond housing standards. We know that various medical and social problems are related to poor housing conditions and quality of life. The Government of Canada must make the necessary efforts to correct the situation without offloading the problems to the first nations.

Bill C-20 will help first nations who so desire to participate significantly in their economy and encourage private investment on their lands, which is more difficult at present. First nations wanting to borrow money to develop their community infrastructure face transaction costs, processing delays and interest rates that are far too high, even prohibitive.

Despite the positive aspects of this bill, we must not lose sight of some of the basic principles it must respect. First, will it protect the first nations' right to self-determination? Will it benefit first nations, particularly those in Quebec? Will it protect the rights of first nations that opt out of the legislation and the obligations toward them? Will it help redress the fiscal imbalance of first nations that take advantage of this legislation? We may not get all the answers today, but we will make sure the minister does not forget these questions.

For the Bloc Québécois, aboriginal independence claims are very important and must be respected. Recently, with Bill C-14, we supported the aboriginal peoples' right to self-government. Bill C-14 was about the Tlicho people. This bill will help those first nations who so desire to access the financial tools they have been lacking and that the other levels of government have been using for a long time.

That is why we are in favour of Bill C-20.